Question 1

In 2020, Buildall Inc. (Buildall) entered into a $60 million contract to construct a building for a local bank. The contract is expected to take three years to complete. Buildall uses the input method to estimate the stage of project completion. Buildall reports under IFRS. The following data pertain to the construction period:

(in millions)	2020	2021	2022
Actual costs incurred in the year	$15.4	$13.0	$16.0
Estimated remaining costs to complete	28.6	19.6	0
Billings during the year	18.0	20.0	22.0
Collections during the year	14.0	19.6	26.4

What amount of revenue should Buildall recognize in 2021 on this contract?

Question1 options:

A	$14.5 million
B	$20.0 million
C	$21.0 million
D	$35.5 million

Question 2

Which of the following would be considered an indicator that a significant financing component exists in a transaction under IFRS?

Question 2 options:

A	The amount of consideration and the selling price of the goods are equal.
B	There is a significant delay between the time of the sale and when the customer pays for the goods.
C	The goods were paid for in advance, and the timing of the transfer of those goods or services is at the discretion of the customer.
D	The timing of the recognition of the revenue is the same as the timing of the receipt of the payments.

Question 13 (1 point)

Which of the following is excluded from being recognized as revenue under IFRS?

Question 3 options:

A	Contracts with customers that contain a financing component, such as when payment from the customer is due in two years
B	Contracts that contain amounts collected on behalf of third parties that are part of an agency arrangement, such as when an art gallery sells an artists painting and collects the revenue on behalf of the artist
C	Contracts that contain multiple deliverables, such as a car dealer that sells vehicles with a service contract for a period of time after purchase
D	Contracts with a variable transaction price, such as a long-term contract where the price is based on the rate of inflation over the contract term

Question 4

On September 19, 2020, Sceptre Services Corp. (SSC) signed an agreement with a customer to provide consulting services over a two-year period. If the customer does not cancel the contract prior to its end date, SSC will pay a $2,000 bonus to the customer. How should SSC account for the $2,000 payment to its customer, assuming the entity prepares its financial statements using IFRS?

Question 4 options:

A	SSC should record the $2,000 payment as a contract expense when it is paid.
B	SSC should record the $2,000 payment as a prepaid expense at the inception of the contract.
C	SSC should record the $2,000 payment as a reduction in revenue over the term of the contract.
D	SSC should record the $2,000 payment as a reduction in revenue in 2020.

Question 5

Which of the following is a method used to allocate the selling price to separate performance obligations in a contract under IFRS?

Question 5 options:

A	Expected cost approach
B	Residual approach
C	Actual cost approach
D	Most likely amount approach